The Nuclear Solution to Climate Change

I argued repeatedly that nuclear power should not be considered a solution to climate change – due to environmental and financial concerns (for a summary, see here). Today I found an interesting article concerning the financial side, which is very important, since it is often argued that nuclear is the cheapest energy source we have. Here an excerpt:

There has been ample discussion in recent years of a “nuclear renaissance,” and many politicians and energy analysts believe that a meaningful response to climate change must include a new fleet of nuclear plants in the United States. The long-term planning studies that routinely come out of utilities, advocacy groups, and the Department of Energy now commonly include new nuclear units. However, many of these studies use nuclear and utility industry cost estimates for new nuclear plants, rather than estimates based on the actual experiences of companies currently trying to build nuclear power plants. Given the dollars and the environmental impacts at stake, it is critical that planners make resource decisions using the best information available. [more]

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8 thoughts on “The Nuclear Solution to Climate Change

  1. It is diffcult to comment quoted figures as they are presented in an ad hoc manner. I think nobody disputes high capital costs of a nuclear power station, in the same way it is difficult to dispute low capital costs of a coal fired power station. Cost overruns aren’t specific to the nuclear power industry as they afflict many diverse projects. Reasons for that are complex. Will the “green” energy sector be free of them? I doubt it.

    Regards,

  2. Will the “green” energy sector be free of them? I doubt it.

    No disagreement here. Although cost overruns in smaller projects are mostly rather manageable. On the other hand, if we turn to large-scale renewable projects, e.g. most hydroelectric, Desertec-like or offshore wind power, there is not much difference between them and “conventional” power. Cost overruns are probable but highly unpredictable.

  3. May I just add something. Most often than not projects are done by very experienced companies which ( due to their experience ) are able to price a project with a very high level of accuracy. However, there are several factors at play: quality of the documents prepared by the client or client’s consultants, knowledge of environment in which the project is going to be executed
    ( newcomers will make mistakes without any doubt), contract adjudication process ( how important is cost in comparison to other factors like technical expertise and technology offered), type of contract being signed. If for example client puts price as the main criterion of contract award, prospective suppliers will cut the cost in the hope that the money will be recovered through various claims. Badly prepared client’s project documents result in all sorts of problems and have dire consequences both for the contractor and the supplier. So without looking at the real cause of the costs overruns it is really difficult to state if the true cost of a project should include those additional costs or not. They could be a result of an avoidable set of circumstances.

    Regards,

  4. They could be a result of an avoidable set of circumstances.

    They are rather the result of an unavoidable lack of information. Surely, some obstacles could be overcome through better communication and alignment of goals (whatever this may mean in practice). But the fact is that a big project (be it a nuclear power station, Desertec or an offshore wind farm) is dependent on a magnitude of specific circumstances at the project site. You cannot know them all – some must be extrapolated or estimated in an ad hoc way. Thus cost overruns.

    I guess, this is an advantage of small-scale projects – they depend on an much smaller amount of unknowns.

  5. “You cannot know them all ”

    Yes and no.
    No, if the project is well prepared at the planning stage – the risks of overruns are really small. One must also remember that not all costs are overruns as such. Contract documents include for escalation of prices and cost changes due to various legitimate reasons ( as it happens from time to time). These are true costs of the project and not the overruns.
    Yes , if the planning was not up to standard then everybody takes a risk. Contracting company will try to cover unknow by contingencies but there is a limit to that, otherwise the bid becomes uncompetitive. What is interesting here is the fact that both sides are aware of the danger but try not to address it. The client hopes that extra costs will be somehow avoided ( meaning, will be absorbed by the contractor) while the contractor hopes for some sort of agreement with the client to cover extra costs. It all ends in a mess. In such cases the overruns are really much more than it would be if the project was well prepared and executed.

    Regards,

  6. In such cases the overruns are really much more than it would be if the project was well prepared and executed.

    The problem is, as I see it, unsolvable. It is “per definitionem” so that interests of the contractor and the client cannot be fully aligned. As you rightly write, while the former wants to get “extra costs” covered, the latter wants to avoid them or to shift them to the contractor. You could see it as a kind of a social dilemma – an inherent characteristic of human relationships.

  7. “The problem is, as I see it, unsolvable.”

    It is not that bad. A simple example. You have a problem at home. You phone two companies to have it fixed. The first one, based on you tepephonic description gives you a quotation which looks rather cheap – you are happy. The second one sends a person to see the problem and assess the “damage”. That company comes back a day later with a quotation which is higher than the first one – why pay more ?. There is a 100% guarantee that the first company will start its work with the statements that there will be additional costs as they took your description of the problem at the face value while the problem is much more complicated. One will have such an experience once in a life and later will be careful with the selection and decision making. This applies irrespective of the monetary value of any undertaking.

    Regards,

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